Friday, December 26, 2008

Free Trade vs. Uniform Trade Laws

The Constitution assigns few and limited powers to the federal government. Most power is to reside in the people of the individual states.

But one federal power is "To regulate commerce with foreign nations, and among the several states, and with the Indian tribes."

Is it really possible to have one national government have jurisdiction over commerce, while local governments have jurisdiction over police powers, morals, and social legislation?

Do not the trade laws go along way toward determining wealth and poverty, which in turn determines the social conditions?

Let's say that a federal protective tariff on raw materials ruins manufacturing in one state, causing high unemployment, even while other states benefit and federal revenues increase. But in that one state, revenues fall short even as poverty-induced crime and idleness-induced addiction soar.

Who was responsible for the declining social conditions in that state, but the feds with their power to regulate commerce?

Is it any surprise that if federal trade or monetary policy damages the economy, the people will demand that the feds fix it?

I don't think it should be any surprise that the federal government now has far more power and responsibilities than is granted by the Constitution. Nor is it any surprise that the European Union is exercising more and more influence over the social policies of its member nations. Economic policy is, to a large extent, social policy. Trade laws are a form of social engineering.

There is no doubt that much of American prosperity was the result of free trade between the states. But all that free trade means is that a state or nation allows imported goods free of charge. It does not require a Trade Agreement between states, or uniform trade laws and commercial regulations administered by a central government.

If a state or nation surrenders its trade authority to a central government, it will soon enough lose its other powers as well. The government that calls the shots on trade is the "real" government with all the "real" sovereignty, no matter what paper Constitutions say.

To counter-act this and protect the liberty of the people, an independent state must

a) avoid any confederation, federation, union, alliance, organization, or community based on "free trade," while at the same time,b) resist the temptation to engage in extensive trade protectionism or regulation on its own. Once it does so, it will soon become saddled with more and more extensive social legislation as a means of "fixing" bad trade policy.